DO YOU HAVE EXPOSURE?

  • Do you manufacture products to customers’ specifications?
  • Are your products used as components in products that your customers manufacture?
  • Do your customers financially depend on the quality and reliability of your product?

If any of the above apply to your business, you may find value in Manufacturer’s E&O coverage.

WHAT IS COVERED

Professional liability insurance that covers a manufacturing defect or negligent service that results in a 3rd party financial loss unrelated to bodily injury or property damage. Complements traditional GL / Product Liability coverage, which applies to bodily injury or property damage arising from your product

MITIGATE YOUR RISK

Rigorous Quality Control: Know how customers are using your products and ensure that your quality control procedures
account for your customers’ uses.
Excellent Service: Have a quick response plan in place. Many claims arise because of inadequate response to
notification of an issue.
Contractual Limitation of Liability: Seek to limit your liability for financial loss incurred by the customer in connection with your products.

 

CLAIM SCENARIOS

NOT BUILT TO SPECIFICATIONS
A tool and die shop created a mold to be used to make an engine part. However, the mold was not built to specifications. As a result, the tool and die shop’s client
could not manufacture the engine part by its deadline and sued the tool and die shop for lost revenue and expenses.

INDEMNITY: $750,000
EXPENSES: $65,000

 

NOT CALIBRATED CORRECTLY
A microscope manufacturer sold a microscope to a metallurgical company for a special client job. The microscope was not calibrated correctly, causing the
metallurgical company to give incorrect data to its client, causing the client to use an incorrect product. Therefore, the product did not work properly. The
metallurgical company’s client sued both the metallurgical company and the microscope manufacturer for lost revenue and expenses.

INDEMNITY: $750,000
EXPENSES: $65,000

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